Why global investors are tussling over UK companies

In today’s newsletter:

• Why global investors tussle over UK companies

• Japan’s giant pension fund urged to invest more at home

• Investors cut back bets on soaring Asian chipmakers

Why global investors tussle over UK companies

Any hopes that 2026 would usher in a burst of activity in the UK initial public offering market have already fizzled out. However, that has not stymied the interest of overseas buyers in local companies large and small.

There have been just seven local listings in the first half of the year, raising £577.2mn in total, according to data from professional services company EY.

While the total market value of the new listings is £2.2bn, the lion’s share of that was the float of a stake in Uzbekistan’s national investment fund. This business also raised the largest amount of all the listings at £511mn, writes Ashley Armstrong.

The dearth of new listings comes as overseas buyers are snapping up UK companies at a record pace, putting UK dealmaking on track for its strongest year in almost two decades.

One example, Tate & Lyle, a stalwart of the London market for close to 90 years, last month agreed to a £2.7bn takeover from US rival Ingredion. Bankers and lawyers said that a combination of depressed valuations and the appeal of the international operations of some London-listed companies has encouraged this dealmaking.

Now, even agreed bids from one overseas buyer are gazumped by another. Early last week, budget airline easyJet looked set to agree to an offer from US private credit fund Castlelake worth £6.90 per share, close to the minimum the airline’s vocal shareholders expected.

On Friday, easyJet’s board sharply turned away from Castlelake towards a higher offer of £7.15 from US private equity group Apollo. EasyJet’s share price has nearly doubled in the past two months, after wallowing earlier this year at its cheapest valuation in a decade.

This year there have been 28 proposed takeovers of UK companies worth more than £100mn each, according to separate data from Peel Hunt, with a total value of £59.7bn or about 27 times that of the new entrants’ value.

The government, regulators and stock exchange have tried to attract more companies to list in London by relaxing rules, including on free floats and disclosure requirements. However, many believe that more action is required to encourage more capital to back British companies.

Japan’s giant pension fund urged to invest more at home

Echoing a subject that has come up in other countries, such as the UK and Canada, Japan’s finance minister, Satsuki Katayama, called on domestic pension funds and the public to shift more assets into domestic markets.

Japanese stocks surged almost 2 per cent and the yen rose from a multi-decade low after the announcement on Friday last week. Market traders saw her comments as a form of “stealth intervention” in currency and bond markets. Greater support from domestic investors would ease pressure on Japan’s currency and sovereign debt, write Leo Lewis, Harry Dempsey and William Sandlund.

Katayama said in a press conference that encouraging Japanese pension funds and households “to invest more in Japanese financial assets” was a policy measure that the administration wanted to pursue. She explicitly included the Government Pension Investment Fund, which manages a global portfolio of roughly $1.8tn.

The GPIF’s portfolio is equally weighted between foreign and domestic bonds and foreign and domestic equities, with each asset class receiving about 25 per cent by value. The fund made a shift from domestic bonds into overseas assets as part of a major reweighting in 2014.

The prospect of a sustained repatriation of Japanese assets led by pension funds has long been seen by analysts and traders as a missing ingredient for a full revival of Japan’s capital markets.

Abbas Keshvani, Asia macro strategy director at RBC Capital Markets, said a rotation by Japanese investors from foreign to domestic assets would be “the impulse the yen needs to strengthen”.

“[The] GPIF is the largest investor. When they start to move it influences smaller asset managers to follow suit,” he said, but cautioned: “I think this kind of verbal announcement will be very shortlived if it is not followed through with actual asset allocation changes.”

Masahiko Loo, senior fixed-income strategist at State Street Investment Management, called it a “smart policy signal” when markets had increasingly questioned how much firepower the finance ministry had left for interventions.

“Encouraging domestic institutional capital to stay invested at home is a more durable and structural way to support the yen over time,” he said.

Investors cut back bets on Asian chipmakers after blistering run

Investors are scaling back bets on Asia’s chipmakers as a $1.8tn rally that catapulted them into the global corporate elite begins to unravel, fuelling concerns over their outsized weight in emerging-market indices.

Fidelity International and BlackRock are among fund firms harbouring concerns over the sustainability of a bull run in stocks such as Taiwan Semiconductor Manufacturing Corp, South Korea’s SK Hynix and Samsung Electronics, which are key suppliers in the race among US hyperscalers for AI chips and data centres, write Joseph Cotterill, Emily Herbert and William Sandlund.

The trio has together nearly doubled in market value over the past six months and now accounts for about 29 per cent of the broad MSCI Emerging Markets index, more than most individual countries, despite a recent sell-off in SK Hynix and Samsung.

Foreigners have already sold $100bn in South Korean stocks this year, hitting the won’s value against the dollar, as some investors reach typical thresholds for portfolio concentration limits. Active managers often cannot devote more than 10 per cent of a fund to a single stock, or — for US tax purposes — put more than half of a fund in stocks with individual weights of more than 5 per cent.

While the MSCI gauge is up about 19 per cent so far this year, it has fallen back from its peak as some investors start to take profits and move back into more traditional developing markets that are less correlated to the AI trade.

South Korea’s market has fallen by more than a fifth from its June high, even as SK Hynix, which raised $26.5bn on its Nasdaq debut last week, joined Samsung in posting record profits for the start of the year.

Samsung and SK Hynix made a combined profit of more than $50bn in the first quarter of this year, compared with less than $10bn in the same period last year.

“Emerging markets were seen historically as a diversifier of both risk and performance,” but semiconductor chipmakers now make up large shares of both US and emerging-market indices, said James Johnstone, co-head of emerging and frontier markets at Redwheel.

“Invariably, when you do get this high-concentration element, you can often be calling the top of the cycle,” he said. “Invariably, cycles end one of two ways: either demand comes down and prices collapse, or supply comes in and prices collapse.”

High-profile investor Terry Smith has accused Unilever of misleading him over its divestment strategy. He also warned that the spin-off of its food business bears “all the hallmarks” of Nelson Peltz, the activist investor who has targeted the group.

National Employment Savings Trust (Nest), the UK’s largest pension scheme with £68bn in assets as of May, is planning to invest up to £1bn in venture capital as it seeks to increase British savers’ exposure to potentially high-growth private assets.

UBS helped trigger a wave of withdrawals from a flagship Blue Owl fund that the Swiss bank had helped build into one of the industry’s largest retail offerings. Investors started pulling large sums of money from Blue Owl Technology Income (OTIC), a $3bn direct lending fund distributed mainly through UBS wealth management, during the final quarter of 2025.

Chicago’s underfunded pension system is in dire condition, with some funds at risk of becoming “completely insolvent” according to Susana Mendoza, Illinois’ top finance official. She is running for mayor of Chicago.

CME Group, one of the world’s largest derivatives exchanges, is launching a new product designed to simplify and lower the cost of a popular but controversial hedge fund bond bet. It’s called the basis trade and it could be available to a broader group of investors.

And finally

Roy Lichtenstein, one of the defining artists of the Pop art movement, transformed the visual language of comics, advertising and commercial printing into some of the most recognisable images of the 20th century. His cool, crisp style appeared machine-done, but his work was meticulously handcrafted. This autumn the Witney Museum of American Art will offer Roy Lichtenstein: Like New, showing roughly 130 of his best and lesser-known works from the early 1940s to the 1990s.

From October 2026